article thumbnail

Valuation Using Multiples—What Is It and How Does It Work? Core Ideas Explained

Valutico

An example of an enterprise multiple: EV/Sales, EV/EBITDA, EV/EBIT and practically all non-financial multiples (e.g. On the other hand, if we use the P/E multiple (with Earnings being the last line item on the P&L), we have already taken the operating, capital and asset structures of the respective companies into consideration.

article thumbnail

Your Guide to Valuing a Company Using the Multiples Approach

Valutico

An example of an enterprise multiple: EV/Sales, EV/EBITDA, EV/EBIT and practically all non-financial multiples (e.g. On the other hand, if we use the P/E multiple (with Earnings being the last line item on the P&L), we have already taken the operating, capital and asset structures of the respective companies into consideration.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Company Valuation Methods—Complete List and Guide

Valutico

The income-based approach determines a company’s value by assessing its anticipated future income-generating potential, employing methodologies such as Discounted Cash Flow (DCF) Analysis, Capitalization of Earnings, the Income Multiplier Method, Dividend Discount Model (DDM), and Earnings-Based Valuation.

article thumbnail

Earnings and Cash Flows: A Primer on Free Cash Flow

Musings on Markets

Thus, we start with operating income or earnings before interest and taxes (EBIT) replacing net income. (I An intuitive reading of the FCFE is that it is cash available to be returned to equity investors, either in the form of dividends or as cash buybacks.